The Dow Jones Industrials (^DJI) fell every single day last week, as investors expressed ongoing fear about the stock market. Chief among the concerns investors face right now is the uncertain situation in the Crimean region, which is currently part of Ukraine but which could vote Sunday to leave that country, with the likely result of its returning to Russian control. If that happens, a host of consequences will follow, including the likely imposition of economic sanctions against Russia that could have dramatic impacts on the global economy. With that in mind, let's look at four Dow stocks that could see the biggest moves next week depending on what happens around the world.
Most investors think of Boeing (BA 1.54%) as one of the obvious beneficiaries of the heightened military awareness that could follow a Crimean vote to leave Ukraine. With reports that the U.S. has repositioned fighter jets into Eastern Europe in order to be ready for whatever might happen, Boeing would benefit from the likely escalation in defense spending if tensions rise, reversing years of budgetary pressure for defense contractors. Yet sanctions could hurt Boeing's commercial aircraft prospects, as the company has orders for about 100 aircraft from airlines in Russia, including more than two dozen 787 Dreamliner orders. That won't crush the company by a long shot, but it is a negative trade-off.
ExxonMobil (XOM 2.19%) also has substantial exposure to Russia, with huge oilfield holdings of 11.4 million acres and a potentially lucrative partnership with Russian oil giant OAO Rosneft. Exxon plans to start developing new fields in Russia's Arctic this year with Rosneft, and as ice in the Arctic Ocean has melted, the prospects for drilling in the polar sea have also gained huge amounts of attention. Sanctions could put a stop to those projects and potentially endanger Exxon's extensive investment in the region. Even though oil prices would probably rise if tensions flare, the net impact could still be negative for Exxon.
Finally, investment banks Goldman Sachs (GS 1.91%) and JPMorgan Chase (JPM 2.87%) both stand to win or lose a lot depending on the resolution of the Crimean situation. Goldman recently made a bold call on the Ukrainian currency, predicting further declines that could leave the nation in what Ukraine's own interim president characterized as a "pre-default" situation. It's unclear whether Goldman has its own proprietary money behind its call for Ukraine's hryvnia to fall to 12 to the dollar from its current level of 9.7. Meanwhile, if the turmoil between Russia and Ukraine erupts into full-blown war, then the resulting carnage in the financial markets will challenge both JPMorgan and Goldman to protect themselves and their clients from losses. Success will mean huge profits, but failure could bring about a repeat of the financial crisis.
All eyes will be on Crimea over the weekend, but watch to see how these four stocks react on Monday. Whatever happens, many stocks throughout the market could see big moves next week.